Dec 1 Shared Sacrifice Includes Federal Employees

There has been somewhat of a negative reactions on corners of the left on President Obama's announcement that he was freezing the pay of federal civilian workers for two years to help reduce the deficit. Well, I can't say that I'm surprised that detractors of the president would do just that, but it is sad to see self-proclaimed progressives losing sight of something deeply embedded in the progressive value system: sharing, which includes, yes, shared sacrifice.

That's what the civilian pay freeze is about: shared sacrifice. In the past decade, as many liberal groups are quick to remind us, the real wages of Americans have fallen. Federal wage schedules have not stagnated however, and overall compensation (wages and benefits) for federal workers grew at a much faster rate than that of private sector employees over the same decade.

Federal workers earned an average of $81,258, plus $41,791 in benefits in 2009, for total compensation of $123,049, reports the Commerce Department. Federal compensation has grown 35.8% faster than the inflation rate since 2000 while private compensation grew 8.8% to an average of $61,051 in compensation.

I say this not to malign the invaluable work that federal employees do, but to point out that in the last decade, while American workers have suffered, those on the federal payroll have not shared in that sacrifice. Federal employees do incredible work, but they are also well compensated There is nothing wrong with having federal employees sacrifice a little as well, while the rest of the country has too - those that are lucky enough to have a job, at any rate.

Many federal workers would still get pay raises the next two years despite the limited salary freeze President Obama proposed this week for 2.2 million government employees.

The president's proposal, if approved by Congress, would stop across-the-board pay hikes set for January 2011 and January 2012.

But many federal workers will receive other pay hikes — longevity increases (called steps), promotions in grade, bonuses, overtime and other cash payments.

A valid counterpoint to the idea of shared sacrifice is the argument that federal employees, while largely insulated from the downturns in the economy, are also highly skilled workers who could potentially make more money in the private sector. Perhaps that's true. But I suspect that for those whom that is true, it has been true for a while, and if making money was their first objective, they would not be working for the federal government in the first place. Their motivators are different: patriotism, service, and country. And right now, their country is asking them to take part in a shared sacrifice. I don't see that as such a bad idea.

As the White House fact sheet on the pay freeze states, this is not to punish federal workers. And it does save real money:

This two-year pay freeze will save $2 billion for the remainder of FY 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years.

$60 billion in 10 years may be pittance in the federal bucket, but an average $6 billion a year is more than half of the entire budget of the EPA. There's a lot that can be done with $60 billion. For example, $60 billion can keep other public employees working in states (such as teachers and firefighters and police officers), it can help extend unemployment benefits, and it can help expand pell grants. In other words, $60 billion is a lot of money.

And it's not coming by itself either. President Obama has been consistent in his demands that those on the federal payroll tighten their belts and that the federal government invest in high priority things in a time of a budget crisis. Once again, we look at the fact sheet:

Upon taking office, the President froze salaries for all senior White House officials; in last year’s budget, he proposed to extend this freeze to other top political appointees; and he eliminated bonuses for all political appointees.

The President directed agencies to dispose of excess real estate to save $8 billion over the next two years.

The President set an aggressive goal of reducing improper payments by $50 billion by the end of 2012.

In each of his budgets, the President put forward approximately $20 billion in terminations and reductions, encompassing more than 120 programs all of which have strong supporters.

The President put forward more than $1 trillion in deficit reduction in his 2011 budget, including a three-year freeze in non-security spending – which will bring non-security discretionary spending to its lowest level as a share of the economy in 50 years.

For those who agree with Dick Cheney and think the deficit need not be dealt with at all, the mere interest on our national debt was $413 billion last fiscal year. That's money we spent and got absolutely nothing in return. No roads were built, no schools were fixed, no one was paid, no airports were secured, no one got broadband Internet access, no college students were helped, no one got a tax cut for that money. Hell, our debt wasn't even reduced. We just spent it. On interest payments. We just spent it. $413 Billion.

Even if we don't want to consider the inevitable rise in interest rates for private borrowers from the crowding out effect (since the government is borrowing so much, there is less available for others to borrow and thus individuals and businesses pay more in interest - especially the ones without perfect credit), consider the money we are having to pay each year without getting a damn thing for it (regardless of what your ideology is). That's why deficits are important. That's why the debt is important. Not because America is going to go bankrupt, but because as long as we are unable to slow the growth of and ultimately shrink our debt, we are going to be spending more and more money to do exactly nothing.

There's a serious discussion to be had on this, and the federal pay freeze is a small but important part of it.